Green Gilt raises £10bn for net-zero initiatives

This was the largest inaugural green issuance by any sovereign, with the largest ever order book for a sovereign green transaction. It will be followed by a second issuance later in the year, with the aim of raising a minimum of £15 billion for government projects to reduce carbon emissions.

Chancellor of the Exchequer Rishi Sunak said that the funding would help the government push forward plans for green transportation, renewable energy projects and natural preservation initiatives.

“In helping us to build back better and greener, it will also help to create jobs as we transition to net zero,” Mr Sunak said.

“Green finance is vital in helping us to tackle the environmental challenges we face, and the launch of our first green bond is a signal that the UK continues to be a world leader in this area,” he said.

Government gilts are available to institutional investors and provide a fixed rate of return until their expiry. The UK’s inaugural Green Gilt is a 12-year bond, maturing on 31 July 2033.

The plan to issue a gilt to fund environmental projects was set out in the government’s Green Financing Framework, published earlier in the summer. According to this plan, the UK has committed to reporting on both the environmental impact and the social co-benefits of green expenditures financed by Green Gilts, such as job creation, access to affordable infrastructure and socioeconomic advancement.

The Green Gilt offering will be followed by the world’s first standalone retail Green Savings Bonds, issued by National Savings and Investments.